Facebook's Zuckerberg ordered to testify over Oculus purchase

Facebook had argued that its CEO should not be required to depose in the lawsuit

Facebook's CEO Mark Zuckerberg has been ordered to depose in an intellectual property dispute between Oculus and ZeniMax Media, as he has "unique knowledge" of his decision to buy and his valuation of the wearable virtual reality technology company.

ZeniMax sued Oculus in May 2014 for exploiting commercially intellectual property the games publisher allegedly shared under a non-disclosure agreement with Oculus, which enabled it to improve on its "crude prototype" of a virtual reality headset.

Facebook had asked last month the U.S. District Court for the Northern District of Texas, Dallas division to rule that Zuckerberg should not be asked to depose as the plaintiffs had demanded to depose him before taking a single deposition in the case. A deposition is the recording of oral testimony from a witness outside a courtroom, usually used to discover the facts before the trial.

"This is clearly improper under the apex doctrine, which requires a party to demonstrate that a high-ranking corporate executive has unique, relevant personal knowledge before attempting to take their deposition," according to the Facebook filing. A litigant has to first exhaust less intrusive discovery options, it added.

ZeniMax had argued that Zuckerberg had personally tested prototypes of the Rift virtual reality headset, including features that were allegedly based on misappropriated ZeniMax technology, before deciding to go ahead with the purchase of Oculus. Facebook said in March last year that it had reached a deal to buy Oculus for about US$2 billion.

U.S. Magistrate Judge Paul Stickney ruled this week that Zuckerberg's deposition should be conducted after other depositions so that "less intrusive discovery" can be completed and information that can be obtained from lesser ranking employees is acquired before the CEO's deposition.

The intellectual property dispute hinges around alleged collaboration from April 2012 between Oculus founder Palmer Luckey, then a video game enthusiast working on a headset, and John Carmack who was technical director for ZeniMax's Texas-based subsidiary id Software, until he joined Oculus in August 2013.

Carmack and others at ZeniMax worked with Oculus to transform the Rift by adding hardware components and developing specialized software for its operation and modified it to run with id Software's computer game "DOOM 3: BFG Edition," which enabled demonstrations of ZeniMax's virtual reality technology, according to a filing by ZeniMax in May last year.

"Without it, there would not have been a viable Rift product," according to the complaint, which claims that ZeniMax did not receive any compensation whatsoever.

Luckey formed Oculus to commercialize the Rift after a successful demo of the technology at the Electronic Entertainment Expo ("E3") industry convention in Los Angeles in June 2012, it added.

ZeniMax did not contribute to any Oculus technology, Oculus has countered previously.

Facebook said in a recent filing that Zuckerberg had "nothing whatsoever to do with the technology that is the heart of Plaintiffs’ complaint—because he had no relationship with Oculus (nor, for that matter, Plaintiffs) during the development of that technology."

The social networking company could not be immediately reached for comment on the decision this week by the judge. "Litigants often demand Mr. Zuckerberg’s deposition, not to uncover discoverable information, but as a tactic to put pressure on Facebook and harass its most senior executive," it had said earlier in a filing.

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John Ribeiro

IDG News Service
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